Markets
LAZ

What's in Store for Eaton Vance (EV) Stock in Q3 Earnings?

Eaton Vance Corp.EV is scheduled to announce third-quarter fiscal 2018 (ended Jul 31) results on Aug 29, before the opening bell. Its quarterly revenues and earnings are expected to improve year over year.

The company is expected to benefit from increase in revenues supported by its strategic initiatives and a rise in assets under management (AUM). However, higher expenses will likely offset the positives to some extent. The Zacks Consensus Estimate for the to-be-reported quarter's earnings is 81 cents, up 30.7% year over year.

In the last reported quarter, Eaton Vance's adjusted earnings were in line with the consensus estimate. Higher revenues were offset by a rise in operating expenses.

Eaton Vance does not boast an impressive earning surprise history. The company's earnings surpassed the Zacks Consensus Estimate in only one of the trailing four quarters. Its average earnings surprise was a negative 1.2%.

Further, the company's shares have lost 1.2% for the three months ended Jul 31, 2018, against the industry 's rally of 2.3%.

Factors to Impact Q3 Results

On the revenue front, Eaton Vance is likely to gain from the continued decent improvement in the global equity markets. Also, AUM is projected witness a modest rise.

Further, management expects active strategy flows to remain positive in the third quarter of fiscal 2018 as a result of the pipeline and the performance it reported in May. The Zacks Consensus Estimate for AUM for the to-be-reported quarter is expected to be $454 billion, up 3.2% sequentially.

However, pressure on average effective fee rates is likely to hurt growth in investment advisory and administrative fees. Nonetheless, the top line is likely to witness improvement as outflows from higher fee strategies will likely decrease. Also, management fees are expected to rise on the back of sales trends and the pipeline of pending flows. The Zacks Consensus Estimate for revenues of $426.9 million shows 8.4% increase from the prior-year quarter.

On the expense front, Eaton Vance's NextShares initiative is likely to lead to a slight rise in costs during the to-be-reported quarter. The company's plan to launch new fund products will likely lead to higher marketing expenses.

Further, non-compensation costs are likely to rise due to higher distribution expenses and fund-related costs. So, overall expenses are expected to trend higher in the fiscal third quarter.

Here is what the quantitative model predicts:

The chances of Eaton Vance beating the Zacks Consensus Estimate are less this time as it doesn't have right combination of two key ingredients - positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks ESP: The Earnings ESP for Eaton Vance is +0.25%.

Zacks Rank: Eaton Vance has a Zacks Rank #4 (Sell), which lowers the predictive power of ESP.

Stocks That Warrant a Look

Ameriprise Financial, Inc. AMP earnings estimates were revised 1.7% upward for 2018, in the past 60 days. Also, its share price has increased 2.6% over the past year. The company carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Lazard Ltd's LAZ current-year earnings estimates were revised 2.5% upward, over the last 60 days. Further, over the past year, this Zacks Rank #2 stock has gained 13.8%.

SEI Investments Company SEIC , with Zacks Rank #2, witnessed nearly 1% upward earnings estimates revision for 2018, in the past 60 days. Also, its shares have rallied 8.8% in the past year.

Wall Street's Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.

Click for details >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Lazard Ltd (LAZ): Free Stock Analysis Report

Ameriprise Financial, Inc. (AMP): Free Stock Analysis Report

Eaton Vance Corporation (EV): Free Stock Analysis Report

SEI Investments Company (SEIC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

LAZ SEIC AMP

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More